Legal Ombudsman to clampdown on claims management companies

At long last, some well overdue commonsense from the Ministry of Justice – which today set out its eagerly awaited plan to hand over responsibility for complaints against Claims Management Companies to the Legal Ombudsman with effect from April 2013.

Currently, any complaints against claims management companies (or CMCs) are dealt with by the Claims Management Regulation Unit, an internal unit of the MoJ itself. Apparently the plan is that this unit will stay within the Ministry of Justice but with a different focus – including taking “wider action” against those CMC’s break the industry guidelines and rules. The transfer of responsibility for complaints to the Legal Ombudsman will mean that in the case of a proven complaint, the Ombudsman can compel a CMC to pay compensation to the injured party.

The legal industry have heartily welcomed this move. The Ombudsman has a reputation in some parts of the legal profession for taking what many consider to be an overly hard-line against law firms for any allegation of poor service, however small, in huge contrast to the Ministry of Justice approach to CMC’s who seem regularly get away with mis-selling and fraud.

In fact, on Radio 4 this morning, the Legal Ombudsman confirmed that there were already CMCs being paid for passing on to solicitors, claims against other claims management companies for mis-selling! Some people believe that much of the claims culture is a myth – but this kind of ludicrous situation beggars belief.

The sooner the Legal Ombudsman clamps down on many CMCs who are simply parasites, the better.